Scenarios for the future of the gas networks

Transcription

1 Scenarios for the future of the gas networks Paul E. Dodds

2 Scenarios 1. Heat transition 2. Decarbonised gas 3. Business as usual

3 Method for comparing scenarios Economic focus Model of the whole UK energy economy UK MARKAL Assume: 1. Iron Mains Replacement Programme continues as planned 2. No security of supply issues for importing natural gas 3. Micro-CHP fuel cells and CCS technologies become available in future 4. UK CO 2 emissions will be cut by 80% in 2050 relative to 1990, to 118 MtCO 2 5. No atmospheric CO 2 sequestration (e.g. biomass CCS)

4 Methodology Why this model? Model type EWP 03 CAT Strategy Energy Review EWP 07 CC Bill CCC 1 st report LCTP STND STND MACRO MED CCC & DECC analysis Stochastic Funding UK Government UK Government, CCC UKERC, Research council projects, UK-Japan LCS, Ofgem, NGOs etc Rapid simple structured model development to inform EWP 03 CCS enhancement for CAT strategy Major 2 year UKERC programme; enhanced UK model with MACRO extension MED model development with major CCC and UKERC scenarios Stochastic MED model

5 MINING LIMITS & TRADE Methodology Assessing Energy, Economy, Engineering & Environment (E4) Interactions ENERGY AND ECONOMY AVAILABILITY/CHOICE OF TECHNOLOGIES GDP & CAPITAL REQUIREMENTS UK MARKAL ENERGY SERVICE DEMANDS ENVIRONMENTAL LIMITS ENVIRONMENTAL EFFECTS ENVIRONMENT 5

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7 Methodology Characterisation of the MARKAL model Bottom-up Perfect foresight Cost-optimisation Elastic demands Energy flows Environmental constraints, economic and policy focus

8 Methodology Revision of the UK MARKAL gas energy system

9 Scenario 1: Heat transition Key outcome of all UK decarbonisation studies Electric heat pumps Biomass boilers District heating Low-carbon buildings are a important part of the Carbon Plan

10 Scenario 1: Heat transition Residential heat demand

11 Scenario 1: Heat transition Infrastructure lock-in or stranded assets? Impact of the Iron Mains Replacement Programme in 2050

12 Scenario 2: Decarbonised gas Biomethane introduced in 2009 Hydrogen injection and conversion have not been included in previous UK MARKAL studies 1. Which options are feasible? 2. Which options are costoptimal?

13 Scenario 2: Decarbonised gas Cost-optimal biomethane in 2050 only from sewage No CO 2 80% CO 2 constraint constraint Total biomethane consumption (PJ) Biomethane content of total gas consumption 0% 5% Biomethane use in the R&S sectors 0% 0%* Up to 250 PJ biomethane can be used for residential heat, but only if: 1. no heat transition occurs; 2. we require a 90% cut in CO 2 emissions.

14 Scenario 2: Decarbonised gas Hydrogen injection Niche technology More important if no heat transition occurs

15 Scenario 2: Decarbonised gas Hydrogen conversion Requires all appliances to be changed more complex that the switch from town gas to natural gas because: the gas networks are now more complex and integrated; the gas industry is more fragmented. House conversion cost? First estimate between 5bn and 11bn Mains conversion costs? New pipeline construction costs? Safety issues? Operational issues?

16 Scenario 2: Decarbonised gas Table 5: Potential impact of gas decarbonisation options in the period 205 Hydrogen conversion: residential heat demand

17 Scenario 2: Decarbonised gas Hydrogen conversion: residential consumption

18 Scenario 2: Decarbonised gas Hydrogen conversion: technology price uncertainty

19 Scenario 2: Decarbonised gas Hydrogen conversion: residential consumption

20 Scenario 3: Business as usual gas boiler types Source: English Housing Survey

21 Comparison of cases CO 2 emissions in 2050 Scenario R&S Transport Industry Hydrogen Other Heat transition Decarbonised gas Business as usual: natural gas Business as usual: 50% biomethane 44* * Doesn t include methane leakages from the gas network R&S emissions reduce from 71 MtCO 2 to 44 MtCO 2 through demand reduction and complete decarbonisation of the service sector (in all three scenarios)

22 Comparison of cases Cost savings and demand reduction Scenario CO 2 marginal in Change in discounted system cost ( bn) Elastic reduction in residential heat demand in 2050 Heat transition % Decarbonised gas % Business as usual: natural gas Business as usual: 50% biomethane % %

23 Comparison of cases Is fuel poverty an issue?

24 Conclusions Issues What do you do with the houses that cannot use heat pumps, if the network is shut down? Iron mains replacement programme Is it good value for money? Cut back if we are going to shut the network anyway? Alter the programme to enable a switch to hydrogen in a few decades? Fuel poverty Biomass CCS

25 Conclusions Overall conclusions Transmission network still used in all scenarios Low-pressure network future uncertain gas becomes a high-carbon fuel by 2050 The least-cost method is to shut down most of the network, but this raises lots of issues Networks are stranded assets no infrastructure lock-in Biomethane is a niche fuel, best used in industry Hydrogen injection is a niche technology Hydrogen conversion is an interesting but uncertain option Continue using natural gas and decarbonise other sectors?

26 Thank you for listening Questions?